Tuesday, December 30, 2008

Resiliency of human capital

Ed Glaeser writes about New York City today in the New York Times. Housing prices, as any New Yorker is probably fully aware, haven't fallen as much in NYC as elsewhere, and the city's unemployment rate is still below the national average.

Glaeser attributes this to the bright future that is both caused by as well as expected by New York holders of valuable human capital. Education serves as recession insurance; it also seems to have increased returns in densely populated areas, where social interactions may spur increased innovation.